FIRB Defers CNLA Requirement for Registered IT-BPM RBEs

On 23 February 2023, the Fiscal Incentives Review Board (“FIRB”) issued Administrative Order (“AO”) No. 002-2023 deferring the submission by Information Technology-Business Process Management (“IT-BPM”) Registered Business Enterprises (“RBEs”) of the Certificate of Non-Local Availability (“CNLA”) requirement for the issuance of Tax Exemption Indorsement (“TEI”). 

Under Rule 2, Section 4(B)(3) of the Implementing Rules and Regulations (“IRR”) of Republic Act No. 11534 or the CREATE Act, as amended, registered export and domestic market enterprises shall enjoy exemption from customs duties on their importation of capital equipment, raw materials spare parts and accessories for their registered project or activity if they are not produced or manufactured domestically in sufficient quantity or of comparable quality and at reasonable prices. 

Pursuant to FIRB AO No. 001-2023, a CNLA is one of the requirements specific to IT-BPM RBEs to process a TEI from the Department of Finance Revenue Office for new goods imported starting 01 February 2023.

Meanwhile, the Department of Finance and the Department of Trade and Industry are currently drafting a Joint Memorandum Circular (“JMC”) to operationalize Rule 2, Section 4(B)(3) of the IRR of the CREATE Act.

To avoid further impediments to the ongoing import activities of affected IT-BPM RBEs, the TEI may now be processed without the submission of the CNLA, as required by FIRB AO No. 001-2023, pending the issuance of the JMC to operationalize Rule 2, Section 4(B)(3) of the IRR of the CREATE Act.